News
Authorities Create New Body to Integrate Financial Deepening

Friday, 08 April 2016

Authorities Create New Body to Integrate Financial Deepening

Indonesia authorities have launched a Coordination Forum for the Development Financing through Financial Market (FK-PPPK), to intensify coordination on financial market deepening -- that is, increasing provision of financial services with a wider choice of services geared to all levels of society -- in a bid to support national development.

Finance Minister Bambang Brodjonegoro said the fiscal authorities would adjust their policies in line with the measures stipulated in the forum. He said that financial markets should support national development, especially amid a situation of limited liquidity in the country.

 

 

"Together with BI and the OJK, the government has agreed to synergize the effort to rearrange the national strategy for financial development and market deepening," he said at memorandum of understanding (MoU) signing ceremony between the Finance Ministry, Bank Indonesia (BI) and the Financial Service Authority (OJK) on Friday in Jakarta.

BI governor Agus Martowardojo added that the synergy between fiscal, monetary and finance authorities would make Indonesia's financial markets more liquid and efficient.

"We want to make Indonesian financial markets become equal to those in other Asian countries. We also hope that Indonesia will be a center of the world financial market like Singapore and Hong Kong," he said.

The financial development and financial deepening would also make Indonesia's financial markets resilient to global turmoil, Agus added. A more liquid financial market would provide efficient, sustainable and diversified financing instruments to support national development.

"At the moment, our financial development is dominated by the banking industry, which provides about 72 percent of the total development financing," he said.

OJK chairman Muliaman Hadad said the OJK would boost market deepening, especially in capital markets, and optimize the role of the non-bank financial industry. Financial market development and deepening, Muliaman continued, must be followed by supervision management.

"This coordination is not only to build the financial deepening alternatives that enable efficiency and increase liquidity, but also to establish mechanisms of regulation and supervision in order to avoid unnecessary political intervention, especially in the financial industry," he said.

Agus further explained that the transaction value in foreign exchange markets continued to increase, but the volume was only US$4 billion to $5 billion a day, mostly in spot and cash transactions.

It is far lower than that in Thailand and Malaysia, whose foreign exchange transaction volumes were about $11 billion and $13 billion per day, respectively. "A deep financial market is still far from our expectations," he went on.

Meanwhile, the country's bond market ratio was at 2 percent of the gross domestic product (GDP), which lagged far behind Malaysia at 57 percent to GDP and Thailand at 23 percent.

"As bond markets, foreign exchange markets and stock markets are in the jurisdictions of different authorities, it is necessary to strengthen the coordination in taking measures on market deepening, including the harmonization of policies," Agus said. 



http://www.thejakartapost.com/news/2016/04/08/authorities-create-new-body-to-integrate-financial-deepening.html

Related Articles

News

Ditjen Pajak Kaji Revisi Aturan Penagihan Pajak

News

Pemerintah akan Pakai Teknologi Canggih Buru Aset Pajak

News

Pajak e-Commerce akan Bertahap, Dimulai dari Toko Online

MSI Global Alliance

Global Recognition
Global Recognition | Word Tax    Global Recognition | Word TP
Contact Us

Jakarta
MUC Building
Jl. TB Simatupang 15
Jakarta Selatan 12530

+6221-788-37-111 (Hunting)

+6221-788-37-666 (Fax)

Surabaya
Graha Pena 15th floor
Jl. Ahmad Yani 88
Surabaya 60231

+6231-828-42-56 (Hunting)

+6231-828-38-84 (Fax)

Subscribe

For more updates and information, drop us an email or phone number.



© 2020 All Rights Reserved
Need Our Services?